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Winging It

Stock (Symbol) Stock Price

Buffalo Wild Wings (BWLD)

$140

Data is as of Expected to Report Sector

May 16, 2014

Jul 28 – Aug 01

Retail & Travel

Sharek’s Take
David SharekBuffalo Wild Wings (BWLD) continues to kill it because of lower wing prices. Profits soared 71% past quarter on only a 21% increase in sales. Next qtrs estimate increased too, but after that the company has tougher comparisons. Right now teen profit growth is expected later this year — and those numbers will be hard to beat because there was also low wing prices a year ago. I feel BWLD’s profit growth peaked last quarter, and will decelerate from here (but still be good). I’m a long-term holder of this stock and think long-term on its valuation. BWLD is flying high, but high expectations are partially reflected in its stock price.
One-Year Chart
BWLD_2014_Q2Wow, BWLD has posted some sweet profits the past four quarters. But notice Estimates don’t look so good. I’ve owned this stock for almost a decade, its worth 25 times earnings most of the time. If growth decelerates that P/E could come down a bit.
Earnings Table
BWLD_2014_Q2_EPSAs mentioned earlier, BWLD had 71% profit growth on only a 21% boost in sales. Lower wing prices really helped, as did same store sales of around 6%. 
 
BWLD beat the street by a good amount last quarter.
 
Annual Profit Estimates keep bulging.
 
Quarterly estimates look good next quarter, then this table shows teens-growth after that. I feel the company has momentum and could continue to raise and beat estimates.
Fair Value
BWLD_2014_Q2_PHNotice here how the P/E was in the low 20s for much of the decade. I think once profit growth gets back to normal BWLD will get a 25 P/E. In the meantime everything is going great so BWLD is worth 30 times earnings.
Ten-Year Chart
BWLD_2014_Q2_10yrI originally bought this stock in 2006, paid $19 for it. Ladies and gentlemen, here is the power of compounding. Such a great ten-year chart, I just want to sit back and look at it for a while.
Power Ranking Bottom Line
Growth Portfolio

20 of 26

Buffalo Wild Wings continues to do well with lower costs of goods sold. But on a long-term view the stock has a 28 P/E and that’s a bit high. I think the stock has momentum now, but I wouldn’t be buying much at this level as BWLD has already been on a run.
 
BWLD is ranked 20th in the 26 stock Growth Portfolio Power Rankings. This stock isn’t in the Aggressive Growth Portfolio.
Aggressive Growth Portfolio

N/A

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